BC's New Contaminated Sites Requirements
“If you were submitting a site disclosure statement, in most cases, there's going to be some requirement for investigation.” – Will Shaw
On Episode 10: BC's New Contaminated Sites Requirements – Mark Fancourt-Smith and Alix Stoicheff speak to Litigation and Dispute Resolution lawyer Will Shaw on recent changes to BC’s Environmental Management Act and the Contaminated Sites Regulation. They discuss what the changes mean for owners and operators of land used for commercial and industrial purposes.
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Don't have time to listen to the full podcast? Here's what this episode covered:
What is the current Contaminated Sites regime in BC? 00:57
What triggers the new Site Disclosure Statement and what will it include? 03:17
What happens after a Site Disclosure Statement is filed? 05:46
What exemptions are in place that do not require a Site Disclosure Statement? 08:09
Who incurs the cost of remediating a property? 10:29
What system-wide results will come out of these new amendments? 12:50
Transcript
Mark Fancourt-Smith 00:07
Welcome to LawsonInsight. I'm Mark Fancourt-Smith.
Alix Stoicheff 00:10
And I'm Alixandra Stoicheff. Thank you for joining us on LawsonInsight brought to you by Lawson Lundell LLP. On this episode, we will be speaking with Will Shaw of our Vancouver office.
Mark Fancourt-Smith 00:19
Will's a senior associate here in Vancouver practicing civil litigation and dispute resolution with a focus on Environmental Public Utility and regulatory law. Will has represented defendants in regulatory and enforcement matters, including environmental events as Occupational Health and Safety matters, and has assisted proponents of mining energy and infrastructure projects navigate the environmental assessment process. Will and I have also had a couple of cases together over the years the last one being an interesting arbitration and mediation regarding a major software procurement where we both ended up being given Hermes ties by the client, in an obscure reference to the movie, The Godfather, Will welcome to the podcast!
Will Shaw 00:57
Thank you. It's great to be here.
Mark Fancourt-Smith 00:58
The reason we wanted to have you on, was to talk about a blog you recently wrote for Lawson Lundell’s Real Estate Law Blog on the amendments to the Environmental Management Act and the Contaminated Sites Regulation [LINK], as I understand the amendments are going to affect the application process for redevelopment of lands formerly used for specified or industrial uses. But before we get to that, in the amendments, sort of at a 20,000 foot level, what is the contaminated sites regime currently in BC?
Will Shaw 01:25
So the contaminated sites regime in British Columbia is what is set up under the two acts that you mentioned are the act and regulations the Environmental Management Act and the Contaminated Sites Regulation to both identify contaminated sites around the province, and also to assist in or in some cases forced to remediation of those contaminated sites. And that can be done either by someone who owns the land and wants to do a number of things with it, like develop it, or decommission an industrial site, or someone that has acquired land that others have contaminated and wants to remediate and recover those costs from former owners and operators of the site. These amendments in particular, which are known as the Stage 13 Amendments, are focused primarily on the first part on identifying contaminated or potentially contaminated sites in BC, at the Ministry of Environment operates its contaminated sites registry for all contaminated potentially contaminated sites across the province. And the site identification process is one through which the ministry can gain knowledge about historical activities on properties that may have caused contamination, and then make that information available for others who can then if they acquire the property later on, they can go to the registry and see if there's any issues with it. Or use that information before they acquire the property to make sure they're not picking up contaminated sites. And this site identification process is specifically related to those sites that have had certain kinds of activities on them in the past whether they be specified commercial or industrial uses.
Alix Stoicheff 03:17
And so Will, these changes could affect people in BC who are buying, selling and developing land. And so in that sense, they're pretty significant. And I understand that one of the main changes under the Stage 13 Amendments is that the province is replacing the old site profile form with the new site disclosure form as part of the site identification process. And so I’m wondering if you can tell us a bit about what triggers the requirement to submit this new site disclosure statement. And what is that statement going to have to include?
Will Shaw 03:45
There are a few activities that can trigger when a site disclosure statement is required. That might be decommissioning or ceasing operations on a site use for one of the specified industrial or commercial uses. Or if you're looking to redevelop the site, and you need to get a municipal building a development permit or maybe subdivision for the property. There's also some triggers now for if you are seeking protection under either the Bankruptcy and Insolvency Act, or the Company's Creditors Arrangement Act, that configure site disclosure statement requirements. And as before, if you are selling land in a private sale, that can lead to requirements to disclose what past uses have been on the site. And one of the things that's different here in the site disclosure statement versus the site profile. The site profile went through a number of yes or no questions to determine what activities had occurred on the site or whether they were say a potential for an underground storage tank or something like that. And now you still have to provide kind of a general overview of the information of the site the identification information, and you have to provide a notice of any past industrial or commercial uses that are set out in Schedule 2 have the contaminated sites regime and give a sense of what might be done with the land going forward. And I think one of the reasons for this change is this is all meant to streamline the identification process and the remediation process. So it's no longer going to a director of contaminated sites to determine whether or not investigations should take place. Now, there's going to be much more automatic requirements for investigation, so they no longer have to go through as much information these yes or no questions. Now, if you were submitting a site disclosure statement, in most cases, there's going to be some requirement for investigation. So they don't need as much of the detail as they had in the previous site profile form.
Mark Fancourt-Smith 05:46
Yeah, so will the question that follows from that is once the requirement for a site disclosure statement is triggered, and the site disclosure statement is duly filed? What generally speaking, are those next steps? What's triggered by the triggering?
Will Shaw 06:00
Yeah, so once you've filed the same disclosure statement, it depends a little bit on the situation that you're in what you have to do next, in the context of municipal or land title application. So for subdivision zoning or development, the next step is usually a preliminary site investigation, which is partly a desktop exercise to look at what historical uses that land has been used for. And also will probably involve some level of on-site work just to do some preliminary checks for any kind of contamination. And if that preliminary site investigation identifies any potential for contamination on the land, then you will likely have to do a detailed site investigation. And then that information would be submitted to the ministry either for a release, which could come in the form of a determination that the land is not contaminated, whether the lines not high risk, or that the proponent will enter into a voluntary remediation agreement with the ministry to make sure that the line will get cleaned up. Or if there's more significant contamination or more significant concerns that it may be necessary to go all the way through to get a certificate of compliance. So to complete the full remediation in some of the other situations, if you're decommissioning it or ceasing operations, again, that's going to be a preliminary site investigation and probably a detailed site investigation. But in another situation like the if you're seeking protection under the Company's Creditors Arrangement Act, or the Bankruptcy and Insolvency Act, all that you're required to do is submit the environmental reports that you have in your possession. And then if you're preparing the site disclosure statement, in the context of the private sale of land, there's no actual requirement to submit it to the ministry, it's more just for the purchasers awareness. So, you know, once you provided that site disclosure statement, there may not be any further steps that you have to undertake at that point.
Alix Stoicheff 08:09
And not all sites are going to require the disclosure statements as I understand it. So for example, like if you've got a subdivision of land for a statutory right of way, or for minor lot boundary adjustments, there's exemptions, as I understand it, and so I'm just wondering if you can chat a little bit about some of the other exemptions and why they're there.
Will Shaw 08:28
Yeah, so there's a number of different ways that you, you might be able to get an exemption. So the best example is, if you've already done some form of remediation, you've already got a valid and subsisting Certificate of Compliance to the site or an approval in principle for the site that this is going to be remediated, you've got an environmental consultant on board, and you've got a plan for doing that. And that's been approved by the Ministry. So if you're already in that process, I and you're, you're moving along in that process, then you may be exempt from the requirement to submit a new site disclosure statement. So long as you're not aware of any further contamination that's occurred after either you've obtained the certificate of compliance or the approval in principle. Similarly, if there's something known as a an environmental management area for which the directors approved a remediation plan that may be exempt in the development and permit application side of things, there are some developments and permits that are exempt. So an application related to demolition no longer requires a site disclosure statement. That's the change in the new Stage 13 Amendments, and then also some kind of superficial development and building permits, like the installation or replacement of fencing or signage or some underground utilities. That doesn't require a site disclosure statement. One of the key thresholds is if there's going to be disturbance of soil Then that will likely involve a site disclosure statement. And the ministry said that almost any amount of disturbance of soil will lead to a site disclosure statement. But if you're doing superficial work above ground, you know, working within buildings, redeveloping those buildings, you may not require the sight disclosure statement. And then as you mentioned, it won't be required for subdivision of land for statutory rights of way or minor lock boundary adjustments.
Mark Fancourt-Smith 10:29
One of the things that comes to mind from this is, of course, the cost. And I know that the regime in BC is essentially a polluter pays regime, but it seems it's almost a polluter pays eventually regime. Is that right?
Will Shaw 10:44
Yeah. So the Environmental Management Act allows for a statutory cost recovery claim, which allows you to recover the reasonably incurred costs of remediating a property and you can bring that claim against any former owners and operators of the site. And then they would be jointly and severally liable for those costs of remediation. So you know, the great thing about that is, you really only need one defendant with pockets deep enough to cover your costs of remediation. And then you can get the money that you spent back. But the problem with that is that you have to spend the money first, you have to have remediated the property, you have to have incurred those costs. And, and so you're putting all that cost up front, and then you may also be adding the cost of litigation on top of that. And so remediating property can be very expensive, even just the investigations to figure out how much contamination is there, it can cost 10s of 1000s of dollars for even for simple sites. So it is quite possible that that it's a long time before you see the recovery of the cost that you spent, it is all meant to go back on those who polluted it. But there is some lead time before you're going to get any of that money.
Mark Fancourt-Smith 12:01
And some risk, I suppose that the person who is required at first instance to undertake those investigations simply doesn't have the funds to do so.
Will Shaw 12:09
That's right. Yeah, I mean, that's true of if you're redeveloping a formal commercial or industrial site, and, I mean, those can be pretty big remediation projects. But it's also true in the context of purchasing a residential property. And if you find out there's an underground storage tank there, that's caused some contamination of your property, and maybe even some of the neighboring properties, it's going to be expensive to clean that up. And that can add quite a bit to the purchase of a residential property. So you know, it's important to do your due diligence before you acquire any of these properties to get a sense of what the environmental liabilities associated with it might be.
Alix Stoicheff 12:50
And Will that I think, ties into the question that I was going to ask, which is just what do you see is sort of the broad system wide results that will come out of these new amendments?
Will Shaw 12:59
So, I think the big thing is that they are taking the decision about whether an investigation is required out of the discretion of the directors hands, and it's more of an automated process now. And that's going to mean that there's more investigations, more money spent on environmental consultants, and to do these investigations and more remediation, which, for the province in a lot of ways is great, it means that the contaminated sites have been cleaned up. But it also means that there could be a lot more litigation where people that are required to conduct these investigations seek to recover those costs against former owners and operators. It could also mean a longer tail for development applications, you know, you won't get your final development permits or your final building permits until you've got either a release from the director or a certificate of compliance. And that could take time. And one of the things that the ministry has said with these Stage 13 Amendments is that if you've got a multi-phase multi-year development, it's not suitable to get a release anymore. Now you will have to go through all the way to a certificate of compliance or to an approval in principle. And again, that's going to mean more work with consultants more remediation, which is good for the land, but is it means a slower development process
Alix Stoicheff 14:27
And also potentially a heightened awareness by previous landowners that just simply by having sold the property, they're not off the hook, so to speak? Certainly, of course, that was the case before but this will no doubt continue to be top of mind for previous landowners in that respect.
Will Shaw 14:42
Yeah, certainly. And one thing that I would say with that is that it shows the importance of getting a certificate of compliance for land that you own, because that gives you protection for any subsequent owners and operators that that pick up the land and try to change the use, you've got that certificate of compliance that protects you from these cost recovery claims. And, you know, you can get contractual arrangements when you're selling a property that will protect you from being sued by the next person that purchases the property. But to get that long term protection, you really need this Certificate of Compliance to make sure that no one down the road comes after you.
Alix Stoicheff 15:27
That's interesting.
Mark Fancourt-Smith 15:28
Well, thanks so much for being on the podcast.
Will Shaw 15:30
Yeah, thanks for having always fun to talk about contaminated sites.
Alix Stoicheff 15:36
For more information on this issue, you can check out the blog post that Will Shaw did, that is available on Lawson Lundell’s website, lawsonlundell.com. You can also stay up to date by connecting with us on social media using the handle @LawsonLundell. And by subscribing to the podcast on Apple, Spotify or Google. Thanks very much for listening!
About LawsonInsight
Hosted by partner Mark Fancourt-Smith and associate Alix Stoicheff, LawsonInsight is a look inside the legal mind. If you would like us to cover a particular topic, please email your requests to inquiries@lawsonlundell.com
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